The Hindu : Business : External debt up at $132 b

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Saturday, Sep 30, 2006
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External debt up at $132 b

Special Correspondent

MUMBAI: The net International Investment Position (InIP) of India has decreased by around $6 billion as at the end of March 2006 due to widening of current account deficit from $5.4 billion in 2004-05 to $10.6 billion in 2005-06, the Reserve Bank of India stated in a press release here on Friday. Net InIP is the stock of external assets less the stock of external liabilities.

India's external debt at end-June 2006 increased by about $6.9 billion over the end-March 2006 level to reach a level of $132.1 billion. Among the components of external debt, external commercial borrowings (ECBs) recorded the largest increase ($ 5.4 billion) during the first quarter.

This is "reflecting strong domestic investment activity'', the RBI stated, adding that "the increase is also partly attributed to the decline in the stock of ECBs at end March 2006.''

While gross disbursements under ECBs were high during 2005-06, net disbursements have remained low on account of principal repayment of India Millennium Deposits (IMDs). Under ECBs, commercial bank loans and foreign currency convertible bonds (FCCBs) account for the major increase during this quarter, the RBI stated.

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